ARCHIVED - Broadcasting Decision CRTC 2002-81
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Broadcasting Decision CRTC 2002-81 |
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| Ottawa, 8 April 2002 | |
| Global Communications Limited Toronto, Hamilton and Kitchener, Ontario |
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| TDNG Inc. Toronto, Hamilton and Kitchener, Ontario |
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| Alliance Atlantis Broadcasting Inc. Toronto, with rebroadcasting transmitters in Hamilton and Kitchener, Ontario |
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| Craig Broadcast Systems Inc., on behalf of a
corporation to be incorporated Toronto, with a rebroadcasting transmitter in Hamilton, Ontario |
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| Applications 2001-0864-8, 2001-0872-1,
2001-0873-9, 2000-2370-6, 2000-2369-8, 2000-2368-0, 2001-0859-9, 2001-0868-0, Public Hearing at Hamilton, Ontario 3 December 2001 |
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New television station for Toronto/Hamilton |
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| The Commission, by majority vote, approves the application by Craig Broadcast Systems Inc., on behalf of a corporation to be incorporated (Craig), for a licence to operate an English-language over-the-air television station to serve Toronto, with an additional transmitter in Hamilton. The competing applications by Global Communications Limited (Global), TDNG Inc. (TDNG) and Alliance Atlantis Broadcasting Inc. (Alliance Atlantis) are denied. | |
| The programming of the new station will include: | |
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| Craig will devote $15.4 million over the licence term to independent production for the Toronto station. This money will be divided between two funds. The New VoicesFund will support ethnic programming, and the Priority Program Fund will support the production of priority programs by the Greater Toronto Area's small and medium sized independent producers. | |
| A majority of the Commission (the majority) considers that the licensing of Craig will: | |
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| Craig currently operates television stations in Western Canada. The new Toronto station will increase the combined potential reach of the Craig television stations from 18% to 42% of the nation's English-speaking population. The majority considers that this increase will augment Craig's ability to provide an additional strong private television voice to serve Canadians, and that the new station will also provide an opportunity for programs produced for Craig's western stations to be broadcast in the Toronto area and for programs produced for the Toronto station to be broadcast in the West. | |
Introduction |
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1. |
At the 3 December 2001 public hearing, the Commission heard five competing applications for new television stations to serve Toronto and other areas of Southern Ontario. Since all of the applicants originally proposed to use channel 52 in Toronto, the applications were mutually exclusive. However, at the hearing, Rogers Broadcasting Limited (Rogers) indicated that it would be willing to establish its station on another channel. In New multilingual ethnic station to serve Toronto, Broadcasting Decision CRTC 2002-82 issued today, the Commission approved in part the application by Rogers for a new ethnic television station to serve Toronto conditional on the use of a television channel other than channel 52. The present decision deals with the remaining competing applications by Global, TDNG, Alliance Atlantis, and Craig. |
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2. |
This decision provides an overview of each of the applications, an assessment of the applications, and then sets out, in more detail, the commitments made by the licensee of the new station. The terms and conditions for the new licence are set out in the Appendix. A detailed discussion of the Toronto extended market and its ability to support new television stations is set out in Introductory statement to decisions approving two new television stations to serve Toronto/Hamilton, Broadcasting Public Notice CRTC 2002-17, 8 April 2002 (Public Notice 2002-17). The public notice also sets out the background to this proceeding. |
Overview of the applications |
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Global |
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3. |
Global proposed to establish three new television stations, one each in Toronto, Hamilton and Kitchener, with program schedules that would consist entirely of Canadian programming. Global characterized the stations as "purely Canadian." The primary focus of the new stations would be to promote Canadian programming. They would provide another window for Canadian programs, and give viewers an opportunity to sample Canadian programs from new digital specialty programming services. The new stations would broadcast Canadian programs from many sources, not just from Global's stations and specialty services. The applicant indicated that at least 48 hours per week of programming on the "purely Canadian" stations would be provided by licensees other than Global. Global also made a commitment that at least 40 hours of programming on the proposed stations would come from Canadian digital specialty services. |
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4. |
Global would provide 22.5 hours per week of local programming on each of the stations, but no news. It would also broadcast 7.5 hours of regional programming that would appear on all three of the new stations. None of the local or regional programs broadcast by the new stations would also be broadcast by the Global stations CIII-TV or CHCH-TV. Global forecast total revenues of $38,595,000 over the first seven years of operation. |
| TDNG | |
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5. |
TDNG proposed to establish three new television stations in Toronto, Hamilton and Kitchener that would provide a service known as "Hometown Television." The stations would be strongly oriented to Canadian programming, with each broadcasting an 85% level of Canadian content during the broadcast day, within the evening broadcast period and between 7 p.m. and 11 p.m. Each of the three stations would broadcast 32.5 hours of local programming each week. Local programming would include 16 hours of news. Most of the remaining Canadian programs on "Hometown Television" would have a regional orientation. |
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6. |
TDNG would rely on the independent production sector as a source of Canadian programming. It indicated that it expected to commission 1,230 hours of original programming a year from local and regional independent producers. In order to finance such programming, the applicant would devote a minimum of $64.3 million over the licence term to cash investment in independent Canadian production. TDNG would also invest an additional $22.874 million over the licence term to repayable equity investments for selected productions. TDNG forecast total revenues of $415,090,000 over the first seven years of operation. |
| Alliance Atlantis | |
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7. |
Alliance Atlantis proposed to establish a new television station in Toronto with additional transmitters in Hamilton and Kitchener. The service would be known as "Greater Toronto Television," and its local programming would be oriented to serve primarily those residents of the Greater Toronto Area (GTA) who live outside the boundaries of the City of Toronto. The applicant proposed to broadcast 41.5 hours of local programming per week. Local programming would include 23.5 hours of news. News coverage of the GTA would be facilitated through the establishment of five regional news bureaus. |
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8. |
The applicant proposed to broadcast a 60% level of Canadian programming during the broadcast day, and 50% in the evening broadcast period. One hundred and seventy-six hours of priority programming broadcast during the broadcast year would be original. Seventy-five per cent of the priority programming would be produced by independent producers without significant ownership links to Alliance Atlantis. The applicant also proposed to broadcast 26 half-hour episodes per year of original drama. These drama series would be commissioned from the independent production sector, and the total budget for each 13-episode series would range from $3 million to $3.5 million. Alliance Atlantis forecast total revenues of $312,719,000 over the first seven years of operation. |
| Craig | |
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9. |
Craig proposed to establish a new Toronto station known as "Toronto One" that would also be available to viewers in the Hamilton area by means of a rebroadcasting transmitter. The applicant proposed to broadcast 14.5 hours of local programming each week between 6 p.m. and midnight, including 4.5 hours of news. Twenty percent of all of Craig's acquired Canadian programming, or about 12 hours of programming per week, would be ethnic programming in English. It considered that this programming would fill a void in the market, appealing either to second and third generation ethnic viewers who preferred to view programming about their communities in English, or to those who had not learned or retained their language of origin but still wished to access programming about their communities. This initiative would also provide cross-cultural or bridge programming between the ethnocultural communities and the official language groups. Craig would also broadcast a weekly half-hour Aboriginal newsmagazine program, and engage Aboriginal reporters to ensure that issues affecting Aboriginal people would be reflected in its news and information programming. |
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10. |
Craig proposed to broadcast a 60% level of Canadian programming during the broadcast day, and 50% in the evening broadcast period. It woulddevote $15.4 million over the licence term to independent productions commissioned by the Toronto station. This money would be divided between the New Voices Fund, which would support ethnic programming, and the Priority Program Fund, which would support the production of priority programs. Some of Craig's local programming would be produced through alliances with Toronto Life magazine and Second City Improv Productions. Craig forecast total revenues of $276,940,000 for the new station over the first seven years of operations. |
Assessment of the applications |
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The Global applications |
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11. |
Global proposed a model designed to have a very limited impact on other Canadian stations serving the Toronto extended market. First, the new stations would broadcast no non-Canadian programming; all programming would be Canadian. Second, they would not compete with existing stations by broadcasting news, an area where the existing non-ethnic over-the-air stations concentrate their local programming resources. Instead, the new stations would serve primarily as promotional vehicles for Canadian programming. |
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12. |
The Commission has carefully examined the characteristics of the Toronto extended market and, in Public Notice 2002-17 issued today, concluded that the Southern Ontario market is capable of sustaining the establishment of an additional English-language over-the-air television station that would compete directly with existing stations. In light of this finding, and notwithstanding Global's commitment to broadcast a 100% level of Canadian programming, the Commission does not consider that Global's proposals make the best possible use of scarce public frequencies in the most populated area of Canada, when considered in comparison with the proposals of other applicants. |
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Moreover, Global, through its ownership of CIII-TV Paris and CHCH-TV Hamilton, currently operates two stations, not only in the Toronto extended market, but also throughout much of Southern Ontario. This is an exception to Building on success -A policy framework for Canadian television, Public Notice CRTC 1999-97, 11 June 1999 (the Television Policy) which states: "The Commission will continue its current policy which generally permits ownership of no more than one over-the-air television station in one language in a given market." Licensing any or all of the "purely Canadian" stations proposed by Global would provide Global with a third programming window. |
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14. |
In light of the concerns set out above, the applications by Global are denied. |
| The TDNG applications | |
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15. |
Private English-language television stations are required to broadcast a 60% level of Canadian programming over the broadcast day and 50% Canadian programming in the evening broadcast period. Under this traditional model, revenues obtained from foreign programming, the audience for which is usually augmented through simultaneous substitution requirements imposed on distributors, are then used to subsidize Canadian programming which, in many instances, cannot recover its costs in the Canadian market. Generally programs with higher production values enjoy higher audience ratings. Under TDNG's proposal to broadcast an 85% level of Canadian programming in all regulated day parts, subsidization from similar amounts of non-Canadian programming would not be available. The Commission therefore explored the applicant's business plan in light of the model that it proposed. |
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The applicant noted that its business plan was based on modest tuning shares ranging from 1.2% in year one to 3.6% in year seven of all viewing by those two years of age and older in the Toronto/Hamilton market. |
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The majority, while acknowledging the prima facie attractiveness of TDNG's commitments to Canadian content, local and regional programming and independent production, is unconvinced that the applicant's business plan makes such commitments realistic or deliverable. Specifically, the applicant's financial commitments to programming, particularly in prime time, appear insufficient to produce the quality of programming required to provide reasonable assurance that Hometown Television will achieve the audiences and advertising revenues necessary for success. |
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TDNG has made commitments to build and staff three stand-alone conventional television stations with all the infrastructure required, and create in the order of 300 jobs. These stations must be funded from advertising revenues which, in turn, can only be generated by popular programs attracting significant audiences. |
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19. |
The applicant made a total commitment of $87.1 million over the licence term to independent production. Of the $87.1 million, $22.874 million would be expended by way of repayable advances to selected independent producers. The applicant's business plan projects that 100% of these advances be repaid to the applicant in the same year as they are received by the independent producers. The majority considers that this is unrealistic. Telefilm Canada, for example, rarely recovers more that 40% of such equity top-up payments and even these amounts are only recovered over time, not in the same year as they are advanced to producers. |
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20. |
The other element of the $87.1 million is the $64.3 million dollars earmarked by TDNG for independent production over the term of the licence. During the public hearing, considerable time was spent evaluating how this sum would be broken down in terms of dollars spent per hour of programming. The numbers arrived at are very low in comparison to industry standards. For example, a total of $1,250,000 was budgeted for 130 hours of prime time documentaries. That works out to $9,615 per hour. Such a cash investment is unlikely to purchase a competitive prime time product. |
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21. |
During the hearing, TDNG indicated that the applicant expected to add further value to the cash expended by way of ".the services that we are going to be providing to them, the facilities, which is probably worth equal amount again in a non-cash piece of that." However, the value of access to facilities, newspaper archives and photo-libraries and other services is difficult to evaluate. Even if the $9,615 is categorized as a licence fee, it leaves independent producers scrambling for other sources of funding, like the Canadian Television Fund, sources which are already unable to meet demand. The fact is that at the end of the day only $9,615 per hour has been earmarked by the applicant for the procurement of documentaries that will be expected to compete for audience share and advertising revenues with the multi-million dollar sit-coms, dramas and other programming offered by TDNG's competitors. |
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22. |
Clearly, TDNG expects to compete successfully because it has projected combined revenues of $415,090,000 over seven years for the three proposed stations. The majority of the Commission remains unconvinced that such expectations are realistic. The majority's concern is exacerbated by two other aspects of TDNG's application. First, it plans to pre-buy hundreds of hours of new programming in order to enjoy volume discounts, thereby running the risk of being stuck with unpopular inventory. Second, Hometown Television would be a stand-alone service since the stations would be the only over-the-air stations operated by TDNG, a party that is new and untried in the conventional television medium. |
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23. |
In light of these concerns, the Commission, by majority vote, denies the application by TDNG. |
| Application by Alliance Atlantis | |
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24. |
Alliance Atlantis' application was based on the traditional model used by most other English-language over-the-air television stations. It proposed a 60% level of Canadian programming over the broadcast day and 50% Canadian programming during the evening broadcast period. |
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25. |
Alliance Atlantis proposed to put special emphasis on providing a new service to viewers in the GTA that live outside the City of Toronto. The 23.5 hours of original local news that it would broadcast each week would include material from news bureaus located in York, Halton, Peel and Durham. Alliance Atlantis would also broadcast 26 half-hour episodes of Canadian drama each year from independent producers, thus increasing the amount of Canadian drama available to viewers in the market. |
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26. |
The majority notes that, if the Alliance Atlantis application were approved, this would mark the company's entry into over-the-air television broadcasting. As such it would be a stand-alone player with respect to over-the-air television services. For reasons described further in the next section of this decision, the majority considers, in this case, it would be better to strengthen an existing player in over-the-air television rather than to license a new player. |
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27. |
The majority also considers that licensing another Toronto television station emphasizing news would not complement the programming services available to the extent that the programming proposed by other applicants would. It notes that the applicant's demand study commissioned from Environics Research Group indicated that 75% of those surveyed were either very satisfied or somewhat satisfied with the news and current affairs programming that covers the specific local area of the GTA in which they live. |
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28. |
In light of the concerns set out above, the application by Alliance Atlantis is denied. |
| The Craig application | |
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29. |
In the Television Policy, the Commission stresses the importance of establishing strong players in the television industry. The Television Policy notes that "in both English and French-language markets, ownership groups have grown in size, become stronger competitors in both domestic and international markets, and increased their capacity to create appealing and popular programming for Canadian audiences." It further notes that ownership consolidation has resulted in "efficiencies and synergies which should provide increased investment in Canadian programming and a greater likelihood of the export of that programming." In New television station on Vancouver Island, Decision CRTC 2000-219, 6 July 2000, the Commission noted the "importance of strong players in the television industry if its regulatory objectives with regard to Canadian content are to be met in the medium and long term in a rapidly changing broadcasting environment." |
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30. |
Craig currently operates television stations in Manitoba and Alberta. With a station in the Toronto extended market, the potential reach of the Craig television stations would increase from 18% to 42% of English-speaking Canadians. The majority considers that this increase in potential reach, which would result from a presence in Canada's most lucrative television market, would strengthen Craig's ability to provide an additional strong private television voice to serve Canadians. Ownership of a Toronto station would provide an opportunity for programs produced for Craig's western stations to be broadcast in Toronto, and for programs produced for Craig's Toronto station to be broadcast in the West, thus facilitating the exchange of programming between the regions. For these reasons, the majority considers that, in this case, the strengthening of a smaller existing regional player should take precedence over the introduction of a new stand-alone player into conventional television broadcasting. |
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31. |
Craig would devote 20% of its Canadian acquired programming, or about 12 hours per week, to ethnic programs in the English language. The applicant identified the Asian Television Network (ATN) as a source of its ethnic programming. ATN is a national specialty service that serves the South Asian communities of Canada. The applicant also identified Fairchild Television as well as operators and potential operators of digital specialty services as other possible sources of programming to fulfil its commitment. |
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32. |
The majority considers that Craig's ethnic programming in English would serve two purposes. First, as the applicant indicated, it would provide a significant service to second and third generation ethnic Canadians who have not learned or retained the languages of their ethnic communities, yet wish to be able to view programming about these communities. As well, this programming would help establish a cross-cultural bridge that would introduce all Canadians to the multicultural reality of our society. The majority considers that this commitment by Craig is a significant step in reflecting and connecting Canada's multicultural community to broader audiences. It further notes that this would be the first time that a significant level of ethnic programming in English would be included in the programming of a non-ethnic over-the-air television station. The broadcast of such programming on a conventional over-the-air television station would make it available to the largest possible audience. |
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33. |
Craig proposed to broadcast, on the new Toronto station in the evening, the weekly half-hour Aboriginal newsmagazine program Sharing Circle that is currently aired by the Craig stations in Manitoba and Alberta. As well, Craig indicated that, if licensed, it would engage Aboriginal reporters to produce segments reflecting the Toronto area for Sharing Circle, and ensure that issues affecting Aboriginal people are reflected in the Toronto station's daily news and information programming. |
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34. |
Over the years, Craig has developed a strong reputation with respect to the reflection of Aboriginal issues in its programming. The majority considers that the commitments that Craig has made for the Toronto station are significant and would bring programming for Aboriginals and programming that discusses issues affecting Aboriginals to the broad audiences that watch the programming of conventional television stations. In New Type B FM Radio Undertaking, Decision CRTC 2000-204, 16 June 2000, the Commission, noting the importance of the reflection of Aboriginals in the Toronto media, licensed Gary Farmer, on behalf of an incorporated body to be known as Aboriginal Voices Radio (AVR) to operate a Native radio station in Toronto. The majority considers that the programming proposed by Craig would complement that of AVR in that it would provide a television platform to reflect the Aboriginal perspective in Canada's largest broadcast market. |
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35. |
Under Craig's proposal, the new station would broadcast 14.5 hours of local programming each week between 6 p.m. and midnight. Four and a half hours of such programming would be devoted to the news program Metro. The applicant, however, indicated that Metro would be more of a newsmagazine than a traditional newscast, with each edition including an investigative consumer report, segments dealing with neighbourhoods, a Toronto Life update, as well as various feature reports. Craig indicated that it planned to schedule its news and information programming so that it appeared at times when other stations were not broadcasting their newscasts, but not during drive times. |
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36. |
The remaining ten hours of local programming in the evening would include programs designed to provide in depth coverage of issues and events in Toronto. As well, the station would broadcast a one-hour local variety show each weekday evening, a weekly comedy program called Second City Improv, as well as aweekly one-hour program called New Voices to tell the story of the GTA's multicultural communities using drama, documentary and music. |
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37. |
The majority considers that the local programming proposed by Craig would complement the programming provided by other television licensees. It also considers that the agreements that Craig has established with Toronto Life magazine and Second City Improv Productions are very valuable in that they would allow Craig, as a new player in the Toronto area, to have access to the expertise of two parties with long experience in entertaining and informing Toronto audiences. |
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38. |
For the reasons outlined above, the Commission, by majority vote, approves the application by Craig to establish a new television station in Toronto, with a rebroadcasting transmitter in Hamilton. |
The new station's commitments |
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39. |
In this section, the key commitments that Craig has made for its new television station are identified and conditions of licence and expectations are set out where applicable. The actual text of each condition of licence is set out in the Appendix. |
| Ethnic programming, Aboriginal programming, Local programming | |
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40. |
Craig must fulfil the following commitments, discussed in the previous section of this decision, as conditions of licence: |
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41. |
The licensee is expected to implement the commitments it has made with respect to the broadcast of Aboriginal programming and the hiring of Aboriginal reporters throughout the licence term. |
| Priority programming | |
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42. |
Under the terms of the Television Policy, licensees of the largest multi-station ownership groups must broadcast at least eight hours per week of priority programming between 7 p.m. and 11 p.m. The largest multi-station ownership groups are defined as those groups that are licensed to operate in several provinces and have a potential reach of more than 70% of the Canadian television audience in their language of operation. |
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43. |
With its new Toronto station, Craig's conventional television stations will have a potential reach of 42% of English-speaking Canadians. However, even though it would not qualify as one of the largest multi-station ownership groups, Craig has made a commitment to broadcast eight hours of priority programming per week between 7 p.m. and 11 p.m. Craig must adhere to this commitment as a condition of licence. |
| Independent Production Funds | |
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44. |
Craig made a commitment to spend $15.4 million on independent production over the licence term, divided between The New Voices Fund and The Priority Program Fund. |
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45. |
Money from The New Voices Fund will be used to finance productions for the program New Voices, which will tell the stories of Toronto's multicultural communities. Over the licence term, Craig has made a commitment to expend at least $6,650,000 from the New Voices Fund for independently-produced ethnic programs in English, and at least $725,000 for script and concept development for such programs, not including administration costs. Craig must adhere to these commitments as a condition of licence. |
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46. |
Nearly $2 million of the money allocated to the Priority Program Fund will be used by Second City Improv Productions to produce the weekly program Second City Improv. The remainder of the money will be available to other small and medium-sized production companies. The aim of the Priority Program Fund is to give Ontario producers enough money to be eligible for support from the Canadian Television Fund that will serve to top up their licence fees and enable them to produce high-quality, attractive programming. Over the licence term, Craig made a commitment to expend at least $6,650,000 from the Priority Program Fund on licence fees for priority programs, and at least $675,000 for script and concept development for such programs, not including administration costs. Craig must adhere to these commitments as a condition of licence. |
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Money from both of these funds that is not allocated to licence fees or script and concept development will be allocated to administration. Combined administration costs over the licence term for the two funds will total approximately $700,000. |
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48. |
At the hearing, Craig indicated that the New Voices Fund and The Priority Program Fund would each have its own separate executive director, and the licensee is expected to fulfil this commitment. |
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49. |
Craig is further required, by condition of licence, to submit audited annual reports to the Commission concerning the receipts and disbursements for each of the funds. |
| Advisory board | |
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50. |
Craig is expected to fulfil its commitment to establish and maintain a Multicultural Advisory Board that will include high profile members of ethnic communities in the area that the new station will serve. The Board will give advice concerning how the new station's programming can best reflect the ethnic diversity of the Toronto area, and will advise the management of the New Voices Fund on how to attract independent producers who can develop programs to reflect the ethnic communities. |
| Cultural diversity | |
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51. |
The Commission expects Craig, and all other television licensees, to contribute to a broadcasting system that accurately reflects the presence in Canada of cultural and racial minorities and Aboriginal peoples. The Commission further expects licensees to ensure that their on-screen portrayal of all such groups is accurate, fair and free of stereotypes. These expectations are fully in keeping with section 3(1)(d)(iii) of the Broadcasting Act, which states that the Canadian broadcasting system should, "through its programming and the employment opportunities arising out of its operations, serve the needs and interests, and reflect the circumstances and aspirations, of Canadian men, women and children, including equal rights, the linguistic duality and multicultural and multiracial nature of Canadian society and the special place of aboriginal peoples within that society." |
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52. |
Craig filed a Diversity and Employment Equity Commitment with its application that set out policies and practices with respect to creating and educating employees about diversity in the workplace. The Commission notes that Craig will be asked to develop and submit a corporate cultural diversity plan for all of its television stations and specialty services as part of the process related to the group renewal of its existing television stations taking place this year. |
| Service to the hearing impaired | |
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53. |
Craig indicated that it would close caption all local news and at least 90% of all programming during the broadcast day throughout the licence term. The Commission has made adherence to this commitment a condition of licence. |
| Service to the visually impaired | |
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54. |
"Audio description" and "described video" are methods of improving the service that television broadcasters provide to the visually impaired. Audio description involves the provision of basic voice-overs of textual and graphic information displayed on the screen. A broadcaster providing audio description will, for example, not simply display sports scores on the screen, but also read them aloud so that the visually impaired can receive the information. |
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55. |
Described video consists of narrative descriptions of a program's key visual elements so that people who are visually impaired are able to form a mental picture of what is occurring on the screen. These descriptions can be provided on the Secondary Audio Programming (SAP) Channel. |
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56. |
Craig indicated that it would provide audio description for important graphic information such as weather alerts and sports scores wherever appropriate. The Commission expects Craig to fulfil this commitment. |
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57. |
Craig further indicated that it would provide described video for all programs produced through the New Voices Fund and the Priority Program Fund. Craig must fulfil this commitment as a condition of licence. |
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58. |
The Commission further notes the increasing amount of programming with described video that is available for acquisition, particularly from U.S. sources. Accordingly, the Commission expects the licensee to acquire and broadcast versions of programs that include described video wherever possible. It also expects the licensee to take the necessary steps to ensure that its customer service responds to the needs of visually impaired viewers. |
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59. |
In addition, the Commission encourages the licensee to reach levels of described video that are similar to those set out in the last licence renewal decisions for the conventional television stations operated by CTV Inc. and Global. Specifically, the Commission encourages Craig to provide two hours per week of described programming in the first year of operation, and to increase this level so that it reaches four hours per week in year five and in later years. At least 50% of this programming should be original programming. |
Cable carriage |
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60. |
As indicated earlier, the new television station will broadcast using two transmitters, one in Toronto and one in Hamilton. At the hearing, the licensee confirmed that it would not expect any cable distributor to carry more than one of these signals. It is incumbent upon cable distributors to seek relief from the provisions of the Broadcasting Distribution Regulations where necessary. |
Interventions |
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61. |
The Commission acknowledges and has considered all interventions submitted in connection with the applications for new television stations considered at the Hamilton hearing. |
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62. |
These interventions included submissions from the licensees of various over-the-air radio and television stations that did not consider that the Toronto market could sustain new private television stations that would compete with existing stations without an undue negative effect on existing stations. The Commission discusses economic issues related to the Toronto market in Public Notice 2002-17 issued today. The Commission has also considered general interventions related to all the applications for new television stations that were submitted by parties that include those concerned with multicultural diversity, cable carriage of new television services, independent production and distribution of programming. It has also considered the interventions and letters of support related to each of the applications. |
| Secretary General | |
| This decision is to be appended to the licence. It is available in alternative format upon request, and may also be examined at the following Internet site: http://www.crtc.gc.ca | |
| 1"Priority programs" are defined in Definitions for new types of priority programs; revisions to the definitions of television content categories; definitions of Canadian dramatic programs that will qualify for time credits towards programming requirements, Public Notice CRTC 1999-205, 23 December 1999. |
Appendix to Broadcasting Decision CRTC 2002-81 |
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Terms and conditions of licence for the new television station serving Toronto/Hamilton licensed to Craig Broadcast Systems Inc. (OBCI) |
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Terms |
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| Subject to the requirements of this decision, the Commission will issue a licence expiring 31 August 2008. This licence will be subject to the conditions specified in this decision and in the licence to be issued. | |
| The licence will only be issued and effective when the undertaking is ready to begin operation. When the licensee has completed construction and is prepared to commence operation, it must advise the Commission in writing. If the undertaking is not constructed and ready to operate within 12 months of today's date, extensions to this time frame may be granted, provided that the licensee applies in writing to the Commission before the 12-month period or any extension of that period expires. | |
| The new station will operate, in Toronto, on channel 52C with an effective radiated power of 59,000 watts and, in Hamilton, on channel 45B with an effective radiated power of 10,000 watts. | |
| Because this licensee is subject to the Employment Equity Act and files reports with Human Resources Development Canada, its employment equity practices are not examined by the Commission. | |
Conditions of licence |
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| 1. a) The licensee shall broadcast, at a minimum, in each broadcast year, an average of eight hours per week of Canadian programs in the priority program categories between 7 p.m. and 11 p.m., from Monday to Sunday. As defined in Definitions for new types of priority programs; revisions to the definitions of television content categories; definitions of Canadian dramatic programs that will qualify for time credits towards priority programming requirements, Public Notice CRTC 1999-205, 23 December 1999 (Public Notice 1999-205) the priority program categories are: | |
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| b) For the purpose of fulfilling the above-noted condition, the licensee may claim the new dramatic programming credit set out in Public Notice 1999-205 as may be amended from time to time. | |
| c) The licensee is not entitled to claim the dramatic programming credit set out in Certification for Canadian Programs - A revised approach, Public Notice CRTC 2000-42, 17 March 2000. | |
| 2. The licensee shall broadcast at least 10 hours per week of local programming in categories other than 1 (News), 12 (Interstitials), 13 (Public Service Announcements) and 14 (Infomercials, promotional and corporate videos) between 6 p.m. and midnight. For purposes of this condition, "local programming" means station productions or programming produced by Toronto-based independent producers that reflects the particular needs and interests of Toronto residents. | |
| 3. At least 20% of Canadian acquired programming broadcast by the licensee in each broadcast week shall be ethnic programming. For the purpose of this condition, "ethnic programming" means programming in English that is specifically directed to any culturally or racially distinct group other than one whose heritage is Aboriginal Canadian, from France, or from the British Isles. | |
| 4. a) Over the licence term, the licensee shall expend at least $6,650,000 in licence fees for independently-produced ethnic programs in English, and at least $725,000 for script and concept development for such programs. Administrative costs shall not be included in these amounts. The programming funded by the amounts set out in this condition shall not include any programming covered by conditions of licence 3 and 4b). For purposes of this condition, "expend" means actual cash outlay. | |
| b) Over the licence term, the licensee shall expend at least $6,650,000 on licence fees for priority programs, and at least $675,000 for script and concept development for such programs. Administrative costs shall not be included in these amounts. The programming funded by the amounts set out in this condition shall not include expenditures on any programming covered by conditions of licence 3 and 4a). For purposes of this condition, "expend" means actual cash outlay. | |
| c) The licensee, beginning in the station's first broadcast year, shall submit annual reports to the Commission setting out details concerning receipts and disbursements for both its New Voice Fund and its Priority Programming Fund. The reports shall be filed concurrently with its annual returns. | |
| 5. The licensee shall caption 90% of all programming during the broadcast day, including 100% of all news programming. | |
| 6. The applicant shall provide described video for all programming produced through the Priority Program Fund and the New Voices Fund. | |
| 7. The licensee shall adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' (CAB) Sex-role portrayal code for television and radio programming, as amended from time to time and approved by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council (CBSC). | |
| 8. The licensee shall adhere to the provisions of the CAB's Broadcast code for advertising to children, as amended from time to time and approved by the Commission. | |
| 9. The licensee shall adhere to the guidelines on the depiction of violence in television programming set out in the CAB's Voluntary code regarding violence in television programming, as amended from time to time and approved by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the CBSC. |
Dissenting opinion of Commissioner Joan Pennefather |
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| I respectfully disagree with the majority decision in this matter. I would have licenced the proposal presented by TDNG Inc. (TDNG) | |
| In my view, in not granting the licence resulting from this hearing to TDNG, the Commission has missed an important and timely opportunity, that is, to bring innovative local and regional Canadian programming to Canadian viewers on over-the-air television. | |
| The Broadcasting Act, among other things, calls for the programming provided by the Canadian broadcasting system to be predominately Canadian, to be varied and comprehensive, and to be drawn from local, regional, national and international sources. | |
| This hearing followed a call for applications for television services to serve all or any of Toronto, Hamilton and Kitchener, Ontario. Among other points, the Commission stated that it would examine the contributions the proposed services would make to the objectives of the Broadcasting Act, and in particular to the production of local and regional programming (Public Notice 2001-51). In my view, TDNG 's proposal met this objective most effectively, offering a substantial amount of local and regional programming and an innovative approach to its production and scheduling. If we consider as well the Canadian Television Policy (Building on Success - A Policy Framework for Canadian Television (Public Notice 1999-97)), the TDNG application met, and even surpassed, the expectations of this policy and in particular its goal to assure local and regional programming continues to be available to Canadian audiences. | |
| It is important to remember that this hearing was about over-the-air commercial television. What set the TDNG proposal ahead of the others, in my view, was its programming schedule: 85% Canadian content all day, every day, all week and all year. Their premise: an 85% Canadian schedule is not only viable, but can also be accomplished by presenting to viewers a high concentration of local and regional programming. And this on three separate stations, in Toronto, Hamilton and Kitchener respectively. The increased benefit to viewers in these communities was evident. | |
| In looking at this schedule, there is another factor to consider. What was proposed here was a new paradigm. That is, a schedule which did not assume that a large quantity of American shows is the only way to support Canadian over-the-air television station. This has considerable merit and deserved to be given the chance to reach Canadian viewers. As well, the Commission heard several serious concerns about a new player chasing a limited supply of popular American shows for a typically Americanized schedule, and the inflationary impact this would have on costs and hence, in the standard paradigm, on the money available to invest in Canadian programming. | |
| TDNG 's schedule, albeit new and daring, was backed, in my view, by a solid and viable financial plan, built on thorough demand studies, and appropriate projections for revenues and market share. In terms of the financing of the programming, I do not share the doubts expressed by the majority and submit that a thorough review of the record bears this out. | |
| In support of its 85% Canadian content schedule, TDNG's production budget covered both internal production and commissions from independent producers for one-offs and/or program series. Assurances were provided regarding production funding for each of the stations. In terms of the commissioned programs, which is the focus of the majority's comments, the applicant planned to provide a combination of licence fees, investment financing and internal resources, with producers maintaining the rights to programs and, of course, having the ability to enhance budgets through the standard funding mechanisms. | |
| There was considerable discussion with the applicant regarding the costs of programming. In assessing this matter, it is very important to consider carefully the specific schedule, or the kinds of programs proposed, be they documentaries (of many kinds), children's, human interest and other non-news shows. In my opinion, assuming only a certain kind of "documentary" and fixing an arbitrary amount on its total production cost, does not give a complete picture of the application. | |
| The application offered different programming (which I believe is a point in its favor). The program budgets will vary. Several examples of feasible production budgets for programs, including documentaries, were presented by the applicant and intervening producers. As a result, I consider the financing assumptions viable. Further, in looking at the totality of the sources for productions, it is interesting to review the applicant's approach to equity investment. In my view, rather than being seen as a doubtful strategy, this should also be assessed as an important contribution to local and regional programming by one of Canada's most experienced media companies. The same can be said for the contribution of internal resources, which included access to considerable archives, as well as studios and equipment. Such resources can be extremely important for producers, especially new ones. | |
| Again, as one of Canada's leading media companies, in discussing the benefits this would offer, and the challenges, the applicant was forthright in offering the means to assure that programming decisions would be editorially independent of newpaper interests, in a manner which is in line with the Commission's position in similar situations. | |
| TDNG's program schedule and financial model are indeed new approaches, and not without some risk. However, in my view, this was a risk well worth taking, for viewers, producers, and in the interests of balance and diversity in Canadian television. | |
| From a policy perspective, there is no doubt that what was being offered would bring new voices and new formats to Canadian over-the-air conventional broadcasting. As noted by a well-known producer, intervening on behalf of TDNG: | |
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| Again, from a policy perspective, I respectfully submit that the TDNG application boldly addressed one of the key challenges facing the Canadian broadcasting system now, and in the future. That is, how to assure Canadian viewers have meaningful local and regional programming on over-the-air commercial television. As said during the hearing by one of the intervenors well versed in Canadian journalism and production : | |
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| This application offered an important opportunity to further the objectives of the Broadcasting Act and the Television Policy. With this in mind, and in full support of the points raised by the Vice Chairperson of Broadcasting in her dissent, I would have licenced the TDNG application. As demonstrated above, I do not agree that it should have been denied for financial reasons. |
Dissenting opinion of Vice-Chair broadcasting, Andrée Wylie |
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| I cannot agree with the decision of the majority. | |
| I would have granted TDNG Inc. (Torstar) broadcasting licences to operate over-the-air television stations in Toronto, Hamilton and Kitchener, Ontario. | |
| Torstar's applications were predicated on the broadcasting of 85% Canadian content during the broadcast day, during the evening broadcast period and during peak time, including eight hours of priority programming weekly between 7:00 and 11:00 p.m. They were also predicated on an intensely local schedule, more particularly a commitment to broadcast 32.5 hours of local programming weekly on each of the three stations. | |
| The majority licensed Craig Broadcast Systems Inc. (Craig) to operate an over-the-air television station in Toronto, with a retransmitter in Hamilton. Craig's application was predicated on the broadcasting of 60% Canadian content during the broadcast day and 50% during the evening broadcast period, the minimum level currently required by the Television Broadcasting Regulations, including eight hours of priority programming weekly between 7:00 and 11:00 p.m. It was also predicated on a commitment to broadcast 14.5 hours of local programming weekly in Toronto. | |
| One of the reasons, if not the principal reason, underlying the majority's denial of Torstar's applications was the belief that Torstar's business plan could not be executed as filed. Torstar's proposals represent a departure from the business model for the provision of over-the-air television that has developed to date. However, a balanced analysis of all the elements of the applications does not reveal, in my view, weaknesses as to their feasibility that warrant a denial on that ground. I note that, at the hearing, seasoned independent producers agreed that attractive programming could be produced within the base budgets proposed by Torstar, when all elements were considered. Moreover, the business risk, if business risk there was, would have been assumed by the applicant, a large, successful Canadian multi-media corporation in the largest market in Canada. | |
| The recent trend toward concentration in the television industry and the consequent focus on national audiences have led to concerns about the continued availability of local programming for viewers. Torstar's proposals provided to the Commission an opportunity, not only to license a new entrant in broadcasting, but to make possible, in the largest market in Canada, the development of a new business model that would bring to television viewers diversity, more Canadian content and more local programming, in conformity with some of the core objectives of the Broadcasting Act. | |
| What Toronto and Hamilton viewers will get instead is, in large part, more of the same. In addition, licensing one more television station based on the conventional business model to compete for foreign programming and national advertising could have an impact on the quality of service delivered to viewers by existing licensees in the markets concerned. |
Date Modified: 2002-04-08
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